Asia stocks slip as Trump threatens higher tariffs if China doesn’t strike a deal

Asia stocks traded lower Wednesday morning as U.S. President Donald Trump threatened to raise tariffs on Chinese goods if the two economic powerhouses do not strike a deal.

Japan’s Nikkei 225 and Topix indexes were fractionally lower in early trade. That came after Japanese merchandise trade data for October from the country’s Ministry of Finance showed exports for the month falling 9.2% year-on-year — well off the 7.6% year-on-year decline expected by economists in a Reuters poll.

South Korea’s Kospi shed 0.37%, while the S&P/ASX 200 in Australia declined 0.96% in morning trade.

Overall, the MSCI Asia ex-Japan index traded 0.23% lower.

Markets have been on edge for much of the trading week as investors seek clarity on the state of U.S.-China trade negotiations as a Dec. 15 deadline approaches. A tariff hike on Chinese exports to the U.S. is set to kick in on that date.

Trump said Tuesday he would “just raise the tariffs even higher” on Chinese goods if a deal between Washington and Beijing is not reached. CNBC reported earlier in the week, citing a government source, that China is pessimistic about the trade deal. That is reportedly due to differing views on the cancellation of tariffs.

The developments came following a recent wave of optimism after Trump said a “phase one” trade deal would get signed sometime in November.

Investors will also watch the release of the People’s Bank of China’s new loan prime rates, expected around 9:30 a.m. HK/SIN.

Overnight stateside, stocks on Wall Street had a mixed session. The Dow Jones Industrial Average fell from record highs, declining 102.2 points to close at 27,934.02. The S&P 500 finished the trading session marginally lower at 3,120.18. The Nasdaq Composite advanced 0.2% to close at 8,570.66, posting a fresh all-time closing high.

Currencies

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.856 after earlier dipping to levels below 97.8.

The Japanese yen traded at 108.43 per dollar after touching lows around 108.8 yesterday. The Australian dollar changed hands at $0.6826 after rising from levels around $0.679 in the previous trading day.

What’s on tap:

  • China: People’s Bank of China publishes new loan prime rates at 9:30 a.m. HK/SIN

— CNBC’s Fred Imbert contributed to this report.

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